Government EPC rating data shows positive progress but more must be done

The UK Government’s latest data on Energy Performance Certificates (EPCs) highlights significant improvements in the energy efficiency of commercial properties.

However, with tighter regulations looming, landlords must prioritise EPC compliance to safeguard their investments and meet the evolving Minimum Energy Efficiency Standards (MEES).

David Thomas, Head of Energy & Sustainability at Vail Williams, explains that landlords must act decisively to future-proof their assets and avoid hefty penalties.

EPC data for commercial properties – a snapshot

Since the introduction of EPCs in 2008, over 1.4 million EPC assessment for non-domestic properties have been recorded in England and Wales, covering nearly 11 million square feet of floor area.

In recent years, we have seen a surge in lodgements, driven by the impact of Minimum Energy Efficiency Standards (MEES) Regulations which set minimum energy efficiency ratings for commercial properties to help the UK reach net zero carbon emissions.

Energy efficiency trends: Progress so far

In 2009, the energy efficiency landscape for commercial premises looked vastly different than it does today.

Between 2008 and 2021, the average annual lodgement hovered at around 87,000. By 2022 and 2023, this had jumped to 113,000 and 140,000, respectively. And in 2024, there were over 103,000 EPCs registered, as landlords respond to MEES compliance pressures.

This upward trend reflects growing awareness among landlords about the importance of EPC ratings and the need for improved energy efficiency in commercial buildings.

The Road Ahead: MEES deadlines and challenges

While progress is evident, significant hurdles remain. Upcoming MEES regulations will further tighten standards:

• By April 2027: A minimum EPC rating of C will be required.
• By April 2030: The bar will rise to a minimum rating of B.

Based on the latest data, 25% of ECP-rated properties are still rated below C, leaving them non-compliant by 2027. Non-compliance could result in penalties ranging from 10-20% of the property’s rateable value, capped at £150,000 per breach.

MEES exemptions: A limited lifeline for landlords

MEES exemptions only offer a temporary reprieve in specific circumstances, but the process is rigorous and time limited. Examples include:

• Tenant refusal: If a tenant denies access for improvement works.
• Devaluation: If the proposed works would reduce the property’s value.
• Seven-year payback rule: If energy savings over seven years would not recoup the cost of improvements.

Registering an exemption: The requirements

• Provide proof, such as three installer quotes and cost calculations, demonstrating non-viability under the payback rule.
• Upload documentation supporting other exemption criteria.
• Remember: Exemptions last only five years, after which the process must be repeated, including efforts to improve the EPC rating.

The administrative burden and temporary nature of exemptions underscore the value of investing in energy efficiency improvements. It is better to get started on ways to improve your EPC rating, in the long run.

Why investing in energy efficiency makes sense

Rather than navigating complex exemptions, landlords are encouraged to focus on upgrading their buildings to meet or exceed future requirements. Not only does this help avoid fines, but it also:

• Increases property appeal to environmentally conscious tenants.
• Enhances long-term asset value.
• Aligns with broader sustainability goals and government incentives.